WiseTech shares tumble as more issues arise
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More news: WiseTech shares have tumbled 4.03% to $101.8 by 12:01pm as the company experiences extended losses due to media reports surrounding its chief executive Richard White.
Morningstar downgraded the company’s fair value estimate by 5% to $109 on the issues.
Morningstar downgrades WiseTech on Richard White scandal
The news: Morningstar has downgraded its fair value estimate for WiseTech by 5% to $109, due to media reports of alleged inappropriate behaviour by its chief executive Richard White.
The numbers: WiseTech last closed at $106.07 and over the last 12 months has rocketed 76.72%. The stock plummeted almost 15% after the allegations surfaced.
Morningstar analyst Roy Van Keulen said there was a 25% chance of the company replacing White and that would lower the value of its shares by around 20% to $90.
If White remains as CEO, Morningstar’s fair value on the stock is at $115.
The context: Van Keulen said the company had been “managed exceptionally well” by White and that he had been instrumental in WiseTech’s key innovations and strategic decisions that were critical to its success.
What they said: “We also see many examples of iconoclastic behaviour related to White’s cultivation of WiseTech’s culture, such as his mantra of ‘slower today, faster forever,’ which starkly contrasts to the technology sector’s mantra of ‘move fast and break things’,” Van Keulen said.
“In recent years, we have also seen White’s influence in capital allocation, with WiseTech investing countercyclically in the acquisition of talent and companies, which was antithetical to the broader tech sector at the time.”
